Himachal Pradesh HC dismisses IIT Mandi plea seeking impleadment in CPWD-pvt contractor arbitration

The court also examined a Memorandum of Understanding (MoU) signed in August 2011 between IIT Mandi and the CPWD. (File photo)

The Himachal Pradesh High Court has dismissed a petition filed by the Indian Institute of Technology (IIT), Mandi, seeking to be impleaded as a respondent in arbitral proceedings between the Central Public Works Department (CPWD) and a private contractor, holding that the institute had no legal basis to be added as a party to the dispute.

The single bench of Justice Ajay Mohan Goel Monday dismissed the petition challenging an April 18 order of the arbitrator, which had rejected IIT Mandi’s application for impleadment in the arbitration proceedings initiated by Supreme Infrastructure India Limited against the CPWD.

The institute had contended that it could be adversely affected by any arbitral award passed against the CPWD as the construction work is related to its academic and residential campus at Kamand in Mandi. The institute apprehended that the CPWD might seek to enforce any adverse award upon IIT Mandi.

Rejecting the plea, the court observed, “Such apprehension was misplaced, as the contract between the CPWD and the contractor did not envisage enforcement of an arbitral award against IIT Mandi. The court held that a mere apprehension was not sufficient ground for impleadment in arbitral proceedings”.

The court also examined a Memorandum of Understanding (MoU) signed in August 2011 between IIT Mandi and the CPWD, under which the latter had agreed to execute construction work for the institute as a deposit. It ruled that the MoU would become relevant only if a dispute arose directly between IIT Mandi and the CPWD and was referred to arbitration.

Upholding the arbitrator’s order, the high court said, “There was no perversity in the decision, noting that IIT Mandi had failed to satisfy the legal requirements laid down by the Supreme Court for impleading a non-signatory in arbitration proceedings”. The court further held that IIT Mandi had neither participated in the negotiations nor played any role in the execution or performance of the contract between the CPWD and the contractor.

It also noted that the claimant contractor had not sought any relief against IIT Mandi. Finding no merit in the petition, the court dismissed the petition with no order as to costs, disposing of all pending applications.